Market Talk – May 12, 2023

ASIA:

A Reuters poll of 19 economists showed that Japan’s core consumer inflation likely increased in April due to retail price hikes offsetting the effect of the government’s energy subsidies. The core CPI, which excludes fresh food but includes energy items, likely grew by 3.4% in April from a year earlier, marking the fastest growth since January. While government subsidies on gas and electricity bills have curbed households’ energy costs, more companies have raised prices of consumer goods and services. Meanwhile, Japanese imports likely contracted by 0.3% in April from a year earlier, the first decline since January, due to easing inflationary pressures in international commodity prices.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 261.58 points or 0.90% to 29,388.30
• Shanghai decreased 37.19 points or -1.12% to 3,272.36
• Hang Seng decreased 116.55 points or -0.59% to 19,627.24
• ASX 200 increased 4.80 points or 0.07% to 7,256.70
• Kospi decreased 15.58 points or -0.63% to 2,475.42
• SENSEX increased 123.38 points or 0.20% to 62,027.90
• Nifty50 increased 17.80 points or 0.10% to 18,314.80

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.0057 or -0.85% to 0.66440
• NZDUSD decreased 0.01057 or -1.68% to 0.61923
• USDJPY increased 1.127 or 0.84% to 135.667
• USDCNY increased 0.01067 or 0.15% to 6.97047

Precious Metals:

• Gold decreased 1.68 USD/t oz. or -0.08% to 2,013.87
• Silver decreased 0.235 USD/t. oz or -0.97% to 23.940

Some economic news from last night:

New Zealand:

Business NZ PMI (Apr) increased from 48.1 to 49.1

Inflation Expectations (QoQ) decreased from 3.3% to 2.8%

Some economic news from today:

India:

CPI (YoY) (Apr) decreased from 5.66% to 4.70%

EUROPE/EMEA:

Official data showed that Britain’s economy grew by 0.1% in the first quarter of 2023, which was better than the shallow recession previously anticipated. However, the unexpected sharp drop in output in March, by 0.3%, highlighted the fragility of the recovery. The services sector dropped 0.4% in March due to weak car sales and retail, caused by bad weather and high inflation. While industrial output and construction grew, the overall economy is expected to grow weakly, with the central bank forecasting a 0.25% expansion for the whole of 2023, although this is an improvement from its earlier prediction of a 0.5% contraction.

The major Europe stock markets had a green day today:

• CAC 40 increased 33.07 points or 0.45% to 7,414.85
• FTSE 100 increased 24.04 points or 0.31% to 7,754.62
• DAX 30 increased 78.91 points or 0.50% to 15,913.82

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00599 or -0.55% to 1.08541
• GBPUSD decreased 0.00555 or -0.44% to 1.24535
• USDCHF increased 0.00356 or 0.40% to 0.89786

Some economic news from Europe today:

UK:

Business Investment (QoQ) (Q1) increased from -0.2% to 0.7%

GDP (MoM) (Mar) decreased from 0.0% to -0.3%

GDP (YoY) (Q1) decreased from 0.6% to 0.2%

GDP (QoQ) (Q1) remain the same at 0.1%

Industrial Production (MoM) (Mar) increased from -0.1% to 0.7%

Manufacturing Production (MoM) (Mar) increased from 0.1% to 0.7%

Monthly GDP 3M/3M Change (Mar) remain the same at 0.1%

Trade Balance (Mar) increased from -16.64B to -16.36B

Trade Balance Non-EU (Mar) increased from -5.79B to -5.46B

France:

French CPI (MoM) (Apr) decreased from 0.7% to 0.6%

French HICP (MoM) (Apr) decreased from 1.0% to 0.7%

Spain:

Spanish CPI (YoY) (Apr) increased from 3.3% to 4.1%

Spanish HICP (YoY) (Apr) increased from 3.1% to 3.8%

US/AMERICAS:

Canadian banks RBC, Scotiabank, and TD were downgraded by a Barclays analyst due to an uncertain outlook and potential recession on the horizon. While inflation remains high, it is expected to decline to around 3% in the middle of this year due to lower energy prices, improved supply chains, and other factors. The pandemic has also significantly impacted the residential real estate market, with home sales dropping to their lowest levels since the housing 2007 financial crisis.

US Market Closings:

• Dow declined 8.89 points or -0.03% to 33,300.62
• S&P 500 declined 6.54 points or -0.16% to 4,124.08
• Nasdaq declined 43.76 points or -0.35% to 12,284.74
• Russell 2000 declined 3.86 points or -0.22% to 1,740.85

Canada Market Closings:

• TSX Composite advanced 2.01 points or 0.01% to 20,419.62
• TSX 60 declined 0.33 of a point or -0.03% to 1,233.25

Brazil Market Closing:

• Bovespa advanced 207.44 points or 0.19% to 108,463.84

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 0.751 USD/BBL or -1.06% to 70.119
• Brent decreased 0.76 USD/BBL or -1.01% to 74.220
• Natural gas increased 0.0425 USD/MMBtu or 1.94% to 2.2325
• Gasoline decreased 0.0187 USD/GAL or -0.76% to 2.4390
• Heating oil decreased 0.0426 USD/GAL or -1.81% to 2.3069

The above data was collected around 13:08 EST on Friday

• Top commodity gainers: Natural Gas (1.94%), Coal (2.15%), Cotton (1.80%) and Lumber (4.35%)
• Top commodity losers: Orange Juice (-3.29%), Rapeseed (-1.88%), Palladium (-2.42%) and Platinum (-3.37%)

The above data was collected around 13:13 EST Friday.

BONDS:

Japan 0.389% (-0.2bp), US 2’s 3.98% (+0.075%), US 10’s 3.4420% (+4.5bps); US 30’s 3.76% (+0.017%), Bunds 2.280% (+6.3bp), France 2.857% (+5.7bp), Italy 4.182% (+7.1bp), Turkey 14.10% (-168bp), Greece 4.017% (-0.8bp), Portugal 3.121% (+6.2bp); Spain 3.366% (+6.2bp) and UK Gilts 3.779% (+7bp).

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